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Friday, July 17, 2009

Worst Seems To Be Over For Asia, Says Hng Kiang

Source : The Business Times, July 16, 2009

Minister's remarks come ahead of Apec meeting

The worst may seem to be over for economies across Asia, but a recovery in trade will be some way off, said Trade and Industry Minister Lim Hng Kiang.

'We don't expect trade flows to be restored to previous levels . . . until the later stages,' he told reporters yesterday, noting that trade tends to contract far more sharply than the general economy in a downturn.

He was speaking ahead of a two-day meeting here next week of Asia-Pacific Economic Cooperation (Apec) trade ministers. The meeting is one of several in the run-up to the main Apec ministerial conference in November which Singapore - as the current chair of the 21-member group - will be hosting.

The Apec trade ministers will review their responses to the economic downturn and see what else can be done to spur recovery. Another key job is to ensure - as far as possible - that protectionism does not rear its head and further impede trade.

It's 'very natural' that domestic pressures to protect local industry and save jobs mount during a downturn, Mr Lim said.

But Apec leaders at their Lima, Peru summit last year had come out strongly against protectionist sentiments, saying that there should be a standstill in measures that effectively thwart trade or investment flows.

'What we need to do is to shine the spotlight on some of these measures and put peer pressure on one another to abide by our leaders' exhortations not to succumb to protectionist pressures,' Mr Lim said.

But there could be 'grey areas' - for instance, if calls to 'buy local' are mere urgings without any clear discriminatory effect against imported goods.

There has to be a collective will not to embark on tit-for-tat measures, and a political will to resist domestic pressures, he said.

The Apec trade ministers will also focus their minds and efforts to restarting the stalled Doha Round of trade talks. World Trade Organization chief Pascal Lamy will be on hand to update the ministers on developments in this area.

Asked about his view on the US stance on free trade, Mr Lim said that he found, from a visit to Washington in June, that the Obama administration has a 'very ambitious, very crowded' domestic agenda, with big-ticket items such as healthcare reforms and energy initiatives, on top of dealing with a crisis.

In such circumstances, 'how do you sell the trade story?' Mr Lim said. There isn't a 'very natural constituency' that would rally behind calls to keep the trade borders open, yet the US must keep global free trade on its agenda, he said. 'This is something we're watching.'

Not least, the Apec trade ministers convening here next week will also seek to move forward on regional economic integration, which would be one solution towards overcoming the global economic crisis.

Apec has long explored as a long-term goal the prospect of a Free Trade Area of the Asia-Pacific (FTAAP).